But even as the trade war between Canada and the United States brings a bunch of extra volatility, experts say in a grand plan that if they stick with it, it might just be the portfolio of young investors.
“The first step is that you will not do anything,” said Sara McCullough, a WD Development certified financial planner and owner. “You’re not panic, you’re not selling anything, you’re not buying anything.”
For those who care about investing, McCullough said it would take a look at its portfolio, review its risk tolerance, and see why they invested.
If your portfolio is designed to help you buy a home in the next three years, first of all, the money shouldn’t be in the market, she said.
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Consider your risk tolerance
Long-term investment is crucial for young investors, which is why they should be able to navigate the current market volatility.
But if they realize they really can’t see big volatility in their portfolio, it might be time to make some changes.
This means reducing the risk level of portfolio by reducing stock exposure and diversification, Paul Shelestowsky, senior investment advisor at Meridian Credit Union and Aviso Wealth. “Maybe we need to add more bonds to the portfolio and fewer stocks to be reassuring,” he said.
Bonds have less volatility than stocks and grow over time. People can also move to guaranteed investment certificates (GICs) that have a fixed rate of return and ensure that your original investment will be safe, Serstowski said. Trade-offs are that GIC returns are usually low, especially when considering inflation rates, which usually lock money for a set period of time.
